“…the names of companies are often very predictive of future failure or success.” — Peter Theil.
“[a] great name can’t fix a bad product. A great product can fix a bad name.” — Paola Norambuena.
Choosing a name for your company, product, or service can be difficult and time consuming. But does the name you choose matter?
In other words, assuming that the name you choose does not conflict with another’s trademark rights and the name is a strong trademark, does the name impact the success of your company, product, or service?
Peter Theil, venture capitalist and co-founder of Paypal, thinks names matter. Peter discusses his view on naming in an exchange with Tyler Cowen:
TYLER COWEN: You mentioned Facebook a few minutes ago. In the back, we were talking about good and bad names for companies. If you could tell us your view on this, how important is the name of a company? What are a few good names, and why, and what are a few bad names?
PETER THIEL: A slight aesthetic thing I believe in very strongly is the names of companies are often very predictive of future failure or success.
PayPal was a very friendly name. It was the friend that helps you pay. Napster was a bad name. It was the music sharing site. You nap some music, you nap a kid. That sounds like a bad thing to be doing.
PETER THIEL: It’s no wonder the government then comes in and shuts the company down, within a few years. You want to be very careful how you name companies. In the sharing economy context, I like Airbnb, way more than Uber. Airbnb sounds like this very innocent, virtual bed and breakfast. It’s [a] very light, nonthreatening company. Uber, it sounds like a bad name from Germany sometime in the 1930s.
PETER THIEL: What are you exactly above? Maybe the law?
PETER THIEL: This is probably something that, again, from government regulatory perspective, Airbnb is a vastly better name than Uber. On the social networking side, I would say that I actually think Facebook was a very good name. MySpace was a more problematic name.
You can say that all these social networks involve both reading and writing. Unlike real life, you have to write, before you read. You first have to write some things about yourself, then you read more about other people. Over time, reading dominates writing.
Facebook was about learning about people around you. About the real identities at Harvard. MySpace started among wannabe actors in Los Angeles, and it was about them coming up with fictional narratives around themselves, and then a lot of other people in LA, who are generally like that.
Because reading dominates writing, Facebook would ultimately dominate MySpace. There’s a certain version where the whole product arc was implicit in the names.
This raises the proverbial chicken-and-the egg question: does the name cause a particular product direction or does the preexisting product direction manifest itself in the chosen product name? Maybe the direction of Myspace was not a result of its name, but a preexisting direction in the company independent of its name. Nonetheless, it is possible that a name can influence or reinforce the direction of a company, product, or service.
Paola Norambuena, the executive director of verbal identity at Interbrand, explains that a great product can fix a bad name and provides examples:
…even if the name they chose received a tepid reception, the power of their production process could still overcome it. Most namers will tell you, as Paola Norambuena puts it, that a “great name can’t fix a bad product. A great product can fix a bad name.” Accenture was met with derision for reminding people of dentures. Gap was an empty space. Yelp was a dog in pain. The iPad was confused with a tampon. Now these names have no odd connotations at all, thanks to the success of the things they name.
So it may have been that after hours upon hours of brainstorming and hours more of deliberations and still hours more of trademark searches, and after the expenditure of tens of thousands of dollars, not as much was at stake as Christensen, van Hoff and Annau thought — at least not in commercial terms. Personal and emotional stakes were a different story….
[The Weird Science of Naming Products, New York Times (Jan 15, 2015)].
Norambuena’s view tempers the otherwise stress inducing, “better get the name right” conclusion from Theil’s view. If a name is predictive of future success, then that predictive tenancy can be overcome by a great product or bad product according to Norambuena.